MarcJarsulic

Economists have long known that raising a country’s educational attainment level is one of the keys to higher economic growth. College graduates make more money than non-college graduates, and are far more likely to be employed. Yet it’s no secret that skyrocketing tuition in the United States has placed a substantial burden on students and families, saddling individuals with crippling levels of debt and placing higher education entirely out of reach for many.

Recognizing the importance of higher education and the cost barriers many families face in affording it, Democratic presidential candidate Hillary Clinton has proposed the New College Compact. To help new students avoid debt, the plan proposes tuition-free attendance at public colleges and universities for students from middle- and lower-income households, and offers to lower interest rates and other forms of relief for existing borrowers.

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Notably, the plan also includes support for historically black colleges and universities and other low-cost, modest-endowment colleges.

Clinton’s plan would expand opportunity and drive economic growth. Specifically, the proposals would likely lead to an increase in college enrollment, would reduce the burden of debt for current students and graduates, and would provide an economic boost to families and communities nationwide.

The investments outlined in Clinton’s plan will also play a crucial role in arresting the never-ending growth in the price of college. Decades of declining spending on higher education by states have forced graduates to take on tens of thousands of dollars in loan debt, starting their careers off already in the red. If left unaddressed, skyrocketing tuition rates could have a chilling effect on college enrollment — especially for lower-income households.

Clinton’s plan takes clear steps to reverse these trends. Additional funds for states paired with clear goals for investment will stop the slide in state funding. Promises to families about the ability to attend college without borrowing will provide much needed certainty and encourage attendance. Relief for existing borrowers, meanwhile, will free up stressed family budgets to invest in other goods and services that boost economic growth.

Raising enrollment and improving affordability would likely come with an additional benefit — more students finishing their degrees, which isn’t only good for those graduating.

Research by economist Enrico Moretti shows that higher college attainment in a region can boost the wages of all workers, even those who do not get a degree. In fact, Moretti’s findings suggest that increasing a region’s share of college graduates 10% would raise the wages of its high-school graduates in the region by 14%. This strongly implies that a federal government investment in college education would help combat wage stagnation for all Americans.

Critics of Clinton’s New College Compact largely focus on its possible effects within the system of higher education. Many of these critiques, however, mischaracterize or misunderstand the plan. For example, concerns that the plan’s additional money for colleges will lead to price increases lack any empirical evidence at public colleges. These critiques also fail to understand that the very idea of the compact is to restore relationships between states and the federal government as a way of reversing the state cuts in public higher education that have sent tuition and student debt spiraling over the past several decades.

One other critique of Clinton’s plan merits special mention — the complaint that the New College Compact will supposedly benefit richer students because they typically attend higher-priced institutions. While America’s elite public colleges still have a long way to go in terms of socioeconomic diversity, making tuition free for low income people will make it easier for them to apply to expensive options they may previously have written off as out of reach.

Importantly, Clinton’s plan also designs its tuition benefit so that lower-income students will be able to use their existing federal grant aid exclusively on living expenses, an important set of costs given that nearly one-quarter of college students face food insecurity.

Higher education is one of the best investments government and individuals can make. Clinton’s New College Compact follows a long tradition of public support for higher education, which has a long and successful history in the United States. Many state universities were created through federal land grants under the Morrill Act, and the GI Bill and its successors have helped to democratize higher education and expand the middle class.

It’s time for America to make a new higher education commitment for the 21st century. By leveraging the success of our existing public higher education system to produce a better pipeline of graduates for American companies to hire, Clinton’s proposal is an investment in our future that puts American businesses, households, and government on a more competitive and stable economic footing.

Marc Jarsulic is the vice president for economic policy at the Center for American Progress Action Fund. CAP Action, an independent, nonpartisan policy institute and advocacy organization, was founded in 2003 by John Podesta, who is currently the chairman of Hillary Clinton’s campaign.

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